Unpaid interns, and the Wisconsin companies that hire them, are sorting out their options after a recent New York court ruling cast doubts on employers' widespread practice of relying on eager young workers to perform without pay.

The case at the core of the renewed national debate over unpaid internships was filed by two unpaid interns who worked on the set of the Fox Searchlight Pictures movie “Black Swan.”

A New York federal district court ruled in June that the interns performed the work of regular employees, and their internships did not meet the standards established by the federal Department of Labor.

In Wisconsin, that case gave hope to former unpaid intern Robert C. Weich, III, whose complaint against 540 ESPN Milwaukee is pending with the Wisconsin Department of Workforce Development's Equal Rights Division.

“I thought that I was wronged,” Weich said. “It's not really about the money. I want to prevent this for future interns.”

Experts say the “Fox Searchlight” case, as it has come to be known, has led some businesses in Wisconsin and nationwide to monitor its potential repercussions. And it has prompted educational professionals to rethink their roles in facilitating or advising about unpaid positions.

'SEARCHLIGHT' FALLOUT

The “Fox Searchlight” case rejected the “primary benefit test”—which stated that an unpaid internship was legal so long as the benefit to the intern outweighed the benefit to the employer—in favor of more explicit standards outlined by the Department of Labor.

“The decision is unique in that it is the first time a federal court has decided that unpaid interns are employees and entitled to protections under the Fair Labor Standards Act,” said Juno Turner, the plaintiffs' attorney in the Fox Searchlight case.

Fox Searchlight has sought to appeal the case to a federal circuit court. But Turner said she is “confident the decision will stand up on appeal.”

If the Fox Searchlight decision stands, it could become a “persuasive authority,” setting an example for other cases filed by unpaid interns in federal courts nationwide.

The FLSA guidelines state that an unpaid internship is permissible if, among other things, it provides an educational environment that benefits the intern rather than the employer, and the intern's work does not displace the work of paid employees.

The ruling is the first favorable decision for interns in a flurry of lawsuits against major media and entertainment companies, including Hearst Corporation, CondeNast, NBC Universal, Warner and Gawker. In July, the PBS talk show host, Charlie Rose, settled a case against him and his production company, offering back wages to approximately 190 former interns.

Facebook chief operating officer Sheryl Sandberg faced criticism and controversy after her non-profit organization, Lean In, posted a listing soliciting applications for an unpaid editorial intern. Sandberg is a well-known advocate for the advancement and equality of women in the workplace.

Derek Johnson, a communication arts assistant professor at the University of Wisconsin-Madison, said media companies have a long history of relying on unpaid help. “The media industry is perceived as very glamorous,” he said. “The narrative that you have to pay your dues to break in is really strong in Hollywood, and the internship is part of that story. How do you break into the industry? Get an internship.”

However, the unpaid internship issue is not just limited to the media and entertainment industries. A report by ProPublica, a nonprofit investigative news organization, shows that cases have been brought against companies in the fashion industry, the health care industry and against law firms.

In July, an ad-hoc movement started by interns in Washington, D.C., the Fair Pay Campaign, formed to target the White House and other political institutions with the aim of ending unpaid internships in politics. The left-leaning political organization, Campaign for America's Future, later joined in the movement to stop unpaid internships in D.C.

'SEARCHLIGHT' SHINES ON WISCONSIN

Weich, a 28-year-old journalism senior at the UW-Milwaukee, worked as an unpaid intern at 540 ESPN Milwaukee, a sports news and talk radio station, during the fall 2012 semester. He alleges in his complaint that the radio station “gained from my busy work” and that he was “never allowed to actually learn hands on.”

In an interview, Weich said he made promotional materials for the radio station's publicity events at local bars. “I wasn't interested in marketing,” he said, so he requested a change. The station then moved him into the sound booth, where he mostly watched employees perform their regular job duties. He learned how to use audio editing programs, and he uploaded audio content to the station's website.

“The company takes advantage of free help,” he said. “They have 15 to 20 interns at any one time. ESPN has them doing some things that normal employees would do.”

He added that the internship caused him economic hardship and displaced time he would normally have spent on his school work.

Weich claims he did not receive college credit for the internship. ESPN disputes that claim, stating in its response that Weich was hired as an unpaid intern with the understanding that it would be for academic credit, and that station employees coordinated with UW-Milwaukee journalism lecturer Jessica McBride.

“She had no idea I was interning at ESPN,” he said, adding that “I definitely didn't receive credit.”

McBride and the UW-Milwaukee journalism department declined to comment on Weich's case, citing academic privacy. 540 ESPN Milwaukee did not respond to several requests for comment in the past month.

Weich's case is still pending with the DWD, which will strive to assist both sides in reaching a voluntary settlement of the complaint. If Weich is not satisfied, he would have the option of filing a case in state or federal court.

Turner said that the Fox Searchlight ruling technically does not set a legal precedent for Wisconsin because a New York federal court decision has no binding authority on a Wisconsin federal court. However, the ruling could become a “persuasive authority,” influencing federal court decisions around the country.

WAITING FOR 'COPYCAT CASES'

Stephanie Salazar Kann, internship coordinator for UW-Madison's College of Letters and Sciences, said that a lot of companies are watching and waiting to see the full impact of Fox Searchlight.

“Companies are waiting to see if any copycat cases come out,” she said. “There has been a lot more media attention to the concept of unpaid internships.”

Experts say that the expense—and a perception it could hurt their chances in the job market—often discourage unpaid interns from filing legal actions.

“Starting a case against a former employer is not an insignificant undertaking,” Turner said. “It takes a certain type. People who have had enough or people who think it's wrong.”

The nonprofit Wisconsin Center for Investigative Journalism (www.WisconsinWatch.org) collaborates with Wisconsin Public Radio, Wisconsin Public Television, other news media and the UW-Madison School of Journalism and Mass Communication.

All works created, published, posted or disseminated by the Center do not necessarily reflect the views or opinions of UW-Madison or any of its affiliates.